Equity can be a powerful financial tool, which you may be able to use to fund the deposit on an investment property.

Your home equity is the difference between your property’s market value and the amount you owe on your mortgage. For example, if your home was worth $800,000 and your mortgage balance was $500,000, you’d have $300,000 in equity.

How do I access equity in my home?

To access your equity, you need to refinance or apply for a loan with your existing lender. However, not all your equity is usable equity.

Lenders typically allow you to borrow up to 80% of your property’s value, minus your remaining mortgage balance. So based on the hypothetical scenario above, you could potentially access up to $140,000 in usable equity:

$800,000 x 80% = $640,000, minus $500,000 owed = $140,000.

What are the benefits of using equity for a property investment?

• No need for a cash deposit – You can use equity instead of saving for a deposit.
• Wealth-building opportunity – Investing in property can help you build long-term wealth through capital growth and rental income.
• Leverage – Using equity allows you to invest without using personal savings.
• Potential tax benefits – Interest on an investment loan may be tax-deductible (although please consult a tax professional for advice).

What are the risks of cashing out equity?

• Increased debt – Borrowing against your equity means taking on additional debt, which must be managed carefully.
• Higher repayments – A larger loan can result in higher mortgage repayments.
• Market fluctuations – If property values fall, you could end up with lower equity or even negative equity.
• Lender restrictions – Lenders may have strict conditions on how much equity you can access.

How to borrow against your equity

When accessing equity, you can choose between:

• Line of credit – A flexible option where you can draw funds as needed. This can be useful for ongoing investment costs but requires discipline to avoid excessive borrowing.
• Lump-sum loan – A one-time increase in your mortgage, typically used for a property purchase or significant renovations. This provides certainty in loan repayments but requires careful budgeting.

What are the steps involved in using equity to buy an investment property?

The first step is to speak to a mortgage broker, who will determine how much usable equity you have, while informing you about your loan options and borrowing capacity. If you decide to proceed, your broker will help you get a pre-approval.

From there, you need to find the right property and then complete the purchase – just as you would in a standard home loan scenario.

A redraw facility is a home loan feature that allows you to access extra repayments you’ve made on your mortgage. If you’ve been paying more than your required minimum repayments, you may be able to withdraw those additional funds when needed.

Every extra dollar you pay into your loan reduces your outstanding balance, which in turn reduces the interest charged. For example, if you owe $500,000 on your mortgage and have $30,000 in redraw, you will be charged interest on only $470,000.

The redraw facility also lets you access these extra repayments if needed. For example:

Your minimum monthly repayment is $2,000, but you decide to pay $2,500 each month.

After 12 months, you will have made $6,000 in extra repayments ($500 x 12).

If your loan has a redraw facility, you can withdraw up to $6,000 when required.

Redraw vs offset account

Both redraw facilities and offset accounts reduce the ‘interest bearing’ portion of your loan, however they work differently:

• Redraw facility: Extra repayments sit within your loan, reducing your loan balance and interest costs. If you withdraw these funds later, you are essentially increasing your loan balance again, which may have tax implications if the property is an investment.

• Offset account: This is a separate transaction account linked to your loan. The money in this account offsets your loan balance, reducing the interest charged, but because it remains separate from your loan, withdrawals are treated as normal bank transactions rather than borrowing.

Another key difference is that redraw facilities may require approval or processing time, whereas offset accounts provide immediate access to funds.

Redraw pros

• Reduces your interest – Extra repayments reduce your loan balance, lowering interest costs.
• Encourages disciplined savings – Funds aren’t as easily accessible as an offset account, helping to prevent impulse spending.
• Promotes flexibility – If needed, you can access the extra repayments rather than taking out a personal loan or using credit cards.

Redraw cons

• Limited access to funds – Some lenders may impose restrictions, withdrawal limits or waiting periods.
• Less flexible than offset – If you need frequent access to your extra repayments, an offset account may be more suitable. There may also be minimum withdrawal amounts for a redraw.
• Potential fees – Some lenders may charge a fee to redraw.

What happens to the redraw when the loan is paid off?

Once your loan is fully repaid, any remaining redraw balance may no longer be accessible. Some lenders automatically apply redraw funds toward paying off the loan, while others may allow you to withdraw the remaining balance before closure.

It’s important to check your lender’s policies when deciding if a redraw is right for you.

For many self-employed borrowers, securing a home loan can be challenging due to the lack of traditional financial documentation such as payslips and tax returns. Low-doc (low documentation) loans provide an alternative pathway, allowing these borrowers to prove their income using different forms of financial evidence.

Instead of full financial statements, lenders typically accept business activity statements (BAS), bank statements and accountant declarations to assess a borrower’s ability to repay the loan. However, these loans often come with stricter lending conditions, including higher deposit requirements – usually at least 20% – and potentially higher interest rates to offset the perceived risk to the lender.

When should a low-doc loan be considered?

Low-doc loans aren’t a first-choice solution, but they can be useful in specific situations, such as:

• Recently self-employed borrowers who don’t yet have two years of tax returns but have a stable income.
• Business owners with irregular income who don’t meet standard loan assessment criteria.
• Clients who minimise taxable income for tax purposes, making traditional income verification difficult.
• Investors who need quick financing but don’t have up-to-date financial statements.

Credit requirements and deposit considerations

Low-doc loans don’t have a universal minimum credit score; instead, lenders assess each borrower’s risk profile individually. A good credit score helps secure better terms, but lenders also consider factors like deposit size and financial stability. In most cases, a higher deposit – typically 20-30% – is required compared to standard home loans.

To improve borrowing options, clients can take proactive steps to strengthen their credit profiles, such as making timely payments, reducing credit card balances and limiting new credit applications. Checking credit reports for errors and maintaining a strong financial history can also help improve lending outcomes.

Finding the right loan solution

While low-doc loans are available – particularly through non-bank lenders that specialise in working with self-employed borrowers – they should only be considered when other options aren’t viable, due to the higher interest rates and fees. Each lender has different requirements, so exploring various lenders is key to finding a suitable loan.

More Australians on lower and middle incomes will be able to enter the property market sooner, after the federal government expanded the Help to Buy scheme in its annual budget.

Help to Buy – which is earmarked to begin later this year – will allow eligible buyers to enter the market with just a 2% deposit, without paying lenders mortgage insurance. The government will take an equity stake in the property, of up to 30% for an established home and up to 40% for a new home.

To be eligible for Help to Buy, the value of the property they purchase must be below a certain threshold.

The price caps – which vary from location to location – were recently increased. The new caps have been linked with the average house price (rather than the average dwelling price) in each state and territory, so that more than 5 million properties now fall under the new price caps.

Changes to how lenders view student loans

The financial services regular, ASIC, has issued new guidance around the way lenders consider student loan commitments, which should make it easier for younger Australians to qualify for mortgages.

It comes after Treasurer Jim Chalmers called on ASIC and the banking regulator, APRA, to change their guidance to lenders, so they could be more flexible in how they treated HELP-HECS debt.

As a result, ASIC has updated Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209), by adding two new paragraphs.

The first new paragraph acknowledges that while a typical loan needs to be paid immediately and consistently, student loans need to be repaid only when the borrower’s annual income crosses a certain threshold (currently $54,435); and that repayments pause if the borrower’s income drops below that threshold.

The second new paragraph says lenders may be able to exclude student loan repayments from their serviceability assessments when borrowers have almost repaid their loans.

Broader lending policies remain unchanged

“The update acknowledges that HELP debts are different from other forms of debt because the amount that is required to be repaid depends on a person’s level of income,” ASIC said in a statement.

“The update is limited to the treatment of HELP debts in lending assessments. It does not change broader lending policies or responsible lending obligations.

Find out your borrowing capacity

Please get in touch if you’re thinking about buying a property.

I can let you know your borrowing capacity and can help you determine whether you may be eligible for the Help to Buy scheme later in the year.

All new cars sold in Australia are now required to meet the New Vehicle Efficiency Standard (NVES), as of 1 January 2025. This incentivises car companies to supply more fuel-efficient cars, which not only reduces carbon emissions but also reduces running costs for drivers.

While it’s still early days, there have been mixed reviews about the implementation of the NVES.

The Federal Chamber of Automotive Industries (FCAI) reported that only 181,797 new vehicles were sold in the first two months of 2025, compared to 194,805 in the first two months of 2024 – and said low consumer demand was placing pressure on the NVES, as consumers still preferred traditional vehicles, which tend to be cheaper upfront, to electric vehicles (EVs), which tend to be dearer.

The FCAI reported there are now 88 EV models supplied to the Australian market, but demand has not kept pace.

However, the Electric Vehicle Council said the NVES was helping more Australians switch to lower-emissions vehicles, with data showing that battery electric vehicles and plug-in hybrid vehicles represented 11.3% of new car sales in February, compared to 9.6% the year before.

“Electric vehicle sales in Australia remain resilient at a time when new car sales are trending downwards and the high cost of living continues to hit families hard,” CEO Julie Delvecchio said. 

“The NVES is helping Australians cut the cost of driving a car by helping them break free from volatile petrol prices. Owning an EV can save drivers up to $3,000 per year on fuel and maintenance costs.”

The broader range of EVs entering the Australian market, including BYD and MG EV, has introduced more affordable offerings to the market, with over 40 new models expected in Australia by the end of the year.

Tax break available for EVs

According to the Australian Taxation Office, businesses may be exempt from paying fringe benefits tax (FBT) on eligible EVs for private use. This could impact anyone purchasing an EV through a novated lease, assuming these conditions are met:

• The first time the car was both held and used was on or after 1 July 2022.
• The car was used by a current employee or their associates (such as family members).
• Luxury car tax was not payable on the importation or sale of the car.

You may be able to capitalise on this FBT exemption by acquiring an EV through a novated lease, which is a salary packaging arrangement between an employer, an employee and a vehicle-leasing company. In this setup, the business makes lease payments from the employee’s pre-tax salary, reducing the employee’s taxable income. Speak to your accountant for more information on the FBT and if this strategy is right for you.

Reach out if you want to acquire a new car, whether through a novated lease or any other arrangement. I’ll compare the range of loan options and manage your loan application.

Last night, Federal Treasurer Jim Chalmers handed down his fourth federal budget. This year the budget is in a deficit, meaning it will spend more than it earns, with the government saying it was designed to help Australians with the cost of living. We have broken down some of the key takeaways that could impact you.

Buying property

Help to Buy scheme

This is a shared equity program that enables first-home buyers to purchase property with just a 2% deposit. The federal government then provides 30% of the purchase price of an existing home, or 40% of a new home, in exchange for a portion for the home’s equity. Owners can then buy out the government’s share over time. 

The scheme is capped at 10,000 places annually (40,000 places over four years). The income caps have increased for eligible buyers from $90,000 to $100,000 for singles and from $120,000 to $160,000 for joint applicants or single parents. Property caps have also been increased to better reflect the market in regional and capital centres in each state and territory.

Infrastructure initiatives

The budget has allocated funding to several major infrastructure initiatives across the country. These will likely impact housing development and reshape property markets in these areas. Some of the initiatives receiving funding include:

• Western Sydney, including for the South West Sydney Rail Extension
• Upgrades to Sunshine Station in Victoria
• The Victorian Road Blitz program
• Safety upgrades on the Bruce Highway in Queensland
• Kwinana Freeway upgrades in Western Australia
• Stuart Highway duplication between Darwin and Katherine
• Arthur Highway upgrades in Tasmania

Encouraging more tradies

One of the biggest barriers Australia has been facing in increasing housing supply is the shortage of skilled tradespeople. The federal government announced it would address this with a new Housing Construction Apprenticeship stream that will give eligible apprentices up to $10,000. It will be paid in $2,000 installments at six, 12, 24, 36 months and at the completion of their apprenticeship. This initiative will commence on 1 July 2025.

Foreign investors are out

It was announced foreign investors will be banned from purchasing existing homes in Australia for two years starting from 1 April 2025. Funds were also allocated to preventing “land banking” by foreign investors. This is intended to open up more opportunities for local buyers to purchase their own property.

Prefabricated homes

$54 million has been allocated to support the construction of prefabricated and modular homes. These are homes that are primarily constructed offsite before being assembled in their final location and could be built up to 50% faster than traditional homes.

Cost of living

Tax cuts

From 1 July 2026, the tax rate will be cut from 16% to 15% on income earned between $18,201 and $45,000. This will then reduce to 14% from 1 July 2027. Taxpayers could end up with an extra $268 in their pocket in the first year and $536 from the 27/28 financial year. The income threshold before the Medicare levy is applied will also be increased, potentially making around 1 million more Australians exempt from the levy or paying a reduced rate.

Electricity bill relief

Rebates on electricity bills will be extended by six months with households and small businesses receiving $150 toward their power. This rebate will be automatically applied over two quarterly instalments. This is intended to not only help with cost of living pressures, but also reduce inflation (the government predicts by about half a percentage point this year).

Childcare

The new 3-day guarantee ensures families are eligible for at least three days of subsidised childcare weekly, replacing the previous Child Care Subsidy Activity Test. This is due to commence on 5 January 2026 and is expected to benefit an additional 100,000 families in its first full financial year.

Health

Funding will be allocated to incentivise GPs to bulk-bill more patients. The goal is for nine out of 10 visits to the GP to be fully covered by Medicare.

There is also a boost to the Pharmaceutical Benefits Scheme (PBS), cutting the cost of a script from $31.60 to $25 from the start of 2026.

Changing jobs

Have you ever seen clauses in your work contract that say you cannot work for a competing business within a certain time frame of leaving your job? The government says these can suppress wages and so will ban the clauses for workers earning less than $175,000. This enables them to move to a competing business or start their own.

Businesses

No extension for the instant asset write-off

The tax benefit will end in July this year with no announcements for an extension. The instant asset write-off enables eligible businesses to claim a $20,000 deduction from their taxes, with this dropping to $1,000 in the next financial year.

Now that the Reserve Bank of Australia has reduced official interest rates, it’s likely a lot of borrowers are now wondering if they can get a better deal on their home loan. If they find another loan that offers better value, they may consider refinancing.

Here are the eight steps involved in the process:

Consider your goals. Think about why you want to refinance. Is it to get a lower interest rate? To change your loan structure? To cash out equity to buy an investment property? To do something else? Once you get clear on your goals, you’ll be better able to assess your options.

Calculate your equity. Estimate how much equity you have in your property. Equity is your outstanding debt expressed as a share of the property’s value – for example, if you owed $400,000 and your property was worth $1 million, your equity would be 60%. The more equity you have, the more lenders may want to do business with you as their risk is lower. This can be reflected as a lower interest rate. Generally, it’s a good idea to have at least 20% equity when refinancing to avoid paying lenders mortgage insurance (LMI).

Review your credit report. You’re entitled to a free copy of your credit report from Equifax or Experian. Check your credit score – if it’s low, make a plan to raise it (such as by paying down debt and paying your bills on time), as this will make you a more attractive applicant in the eyes of lenders. Also, look to see if there are any incorrect negative listings on your credit file – if there are, apply to have them removed, as this can raise your credit score.

Consult your mortgage broker. We can develop an understanding of your situation to run through the options that will help you achieve your goals.

Compare home loans. We will compare the mortgage market on your behalf and then present you with a shortlist of options.

Apply for the new loan. After you choose your home loan, we’ll file the application on your behalf and manage the process from start to finish.

Conduct a valuation. While assessing your application, the lender will order a valuation of your property. This is because they want to make sure the resale value would be sufficient in case you defaulted on the mortgage and they had to sell your home to recoup their money.

Settle on the new loan. Assuming the valuation stacks up, the lender will formally approve your loan. At that point, your old mortgage will be closed (as it will be paid off by your new lender) and you’ll start making repayments on your new loan.

Thinking about refinancing? Reach out to get the ball rolling.

Businesses may be able to claim an immediate deduction for the business portion of the cost of an asset in the year the asset was first used or installed ready for use, according to the Australian Taxation Office (ATO).

Under the instant asset write-off, eligible businesses can make claims on both new and second-hand assets, as well as multiple assets if the cost of each individual asset is less than the relevant threshold.

Under ATO rules, this threshold is $20,000 for assets that were first used or installed ready for use between 1 July 2023 and 30 June 2024.

To be eligible for the instant asset write-off, your company must be a small business – i.e. one with an aggregated turnover of less than $10 million. 

Your business will need to apply the simplified depreciation rules to claim the instant asset write-off, which cannot be used for assets that are excluded from those rules.

According to the ATO, excluded assets include:

• Assets that are leased out, or expected to be leased out, for more than 50% of the time on a depreciating asset lease.
• Assets you allocated to a low-value assets pool before using the simplified depreciation rules.
• Horticultural plants, including grapevines.
• Software allocated to a software development pool (but not other software).
• Assets used in your research and development activities.
• Capital works, including buildings and structural improvements.

The ATO urges businesses to remember that the instant asset write-off eligibility criteria and threshold have changed over time. 

“You need to check your business’s eligibility and apply the relevant threshold amount. The income year in which you may claim an instant asset write-off depends on when the asset was purchased, first used or installed ready for use.”

While you will need to consult a tax professional for advice around using the instant asset write-off, I can help you finance the purchase of vehicles, equipment, computers, machinery and other assets.

It’s common knowledge that it’s possible to refinance a home loan, but you may not realise it’s also possible to refinance a car loan.

By refinancing, you may be able to:

• Reduce your monthly repayments by switching to a loan with a lower interest rate – this might be possible if you didn’t shop around at the time you got your loan or your financial circumstances have improved (thereby allowing you to qualify for a better rate).
• Reduce your monthly repayments by switching to a loan with a longer loan term – but think carefully before going down this path, as you will end up paying more interest over the life of the loan.
• Reduce your life-of-loan interest bill by switching to a loan with a shorter loan term – in return, your monthly repayments will increase.
• Access a better loan product – you may now be able to qualify for a loan with lower fees or more flexible repayment options.
• Consolidate debt – you may be able to roll other debts into your car loan, in order to reduce your overall interest rate and simplify your finances. This isn’t the right strategy for everyone, so speak to your broker to see if it is right for you.
• Remove a co-borrower or guarantor from the loan – this can be done only by closing out the original loan and refinancing to a new one.
• Remove a balloon payment from the loan – this could potentially reduce your life-of-loan costs, although your monthly repayments will increase.

Refinancing process explained

If you want to refinance, reach out to your broker to compare a range of lenders and help you to find a great loan.

Furthermore, we can explain the pros and cons of refinancing, so you can make an informed decision about whether it’s right for you. This includes crunching the numbers to make sure the benefits of refinancing outweigh the costs. 

If you decide to proceed, here’s how the process will work:

• We’ll request documentation from you, in order to apply for a new loan on your behalf. (Refinancing means, technically, opening a new loan, which is why you have to submit a new application.)
• We’ll manage the application process for you – including responding to follow-up queries from the lender – to minimise your stress and workload.
• Once your application is approved, your old loan will be paid off (by your new lender) and you’ll start making repayments on your new loan.

As part of the loan assessment process, the new lender will check your credit score. To avoid nasty surprises, it can be a good idea to order a free copy of your credit report from Equifax or Experian. (You’re entitled to a free copy every three months). We can help you get your credit report.

Rents continued rising in 2024, with the national median rent climbing 4.8% over the year, according to CoreLogic. That included increases of 6.2% in the combined regions and 4.3% in the combined capital cities.

Among the capitals, Perth led the way with 8.1% growth, followed by Adelaide with 6.7% and Hobart with 6.0%.

But while rents increased further during 2024, a lot of heat disappeared from the market over the course of the year, with the pace of rental growth falling to its lowest level since March 2021.

CoreLogic economist Kaytlin Ezzy said affordability had become “a significant drag” on rental growth. Between the start of the pandemic in March 2020 and December 2024, the national median rent had increased 36.1%, equivalent to a rise of $171 per week or $8,884 per year, stretching renters’ budgets to the limit.

“The net result has potentially seen some prospective renters delay their decision to leave the family home, while others have looked to form larger share households as a way of distributing the additional rental burden, unwinding the previous shrinking in the average household size that was apparent through the early stages of covid,” she said.

This shift to larger households was reflected in increased demand for houses (which recorded a median annual rental increase of 5.0%) compared to units (4.2%).

Ms Ezzy said the rental market had also been affected by a change in the balance between supply and demand.

On the demand side, there was a slowdown in migration, which meant there were fewer people fighting for rental accommodation. On the supply side, there was an increase in investor activity, which meant more rental stock became available.

“Together these factors have supported an easing in vacancy rates over the year, from a low of 1.4% in November 2023 to 1.9% at the end of 2024,” Ms Ezzy said.

While the rental boom has eased for now, many property investors are still doing well, given that vacancy rates remain low and rents continue to rise in many parts of the country.